"Rate Lock" and other Ways to Get a Lower Interest Rate

Freezing the Rate

When you are offered a "rate lock" from the lender, it means that you are guaranteed to get a particular interest rate over a determined period for your application process. This prevents you from getting through your entire application process and learning at the end that your interest rate has gone up.

Although there may be a choice of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. The lending institution will agree to lock in an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

Other Interest Saving Strategies

There are other ways to get a lower rate, in addition to choosing a shorter rate lock period. The more the down payment, the better the rate will be, as you will have more equity from the start. You can pay points to lower your rate for the term of the loan, meaning you pay more up front. To a lot of people, this makes financial sense..

At Metro Mortgage, we answer questions about this process every day. Give us a call: 866-300-1550.

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